Gusto Reports $1B Revenue, Moves Closer to IPO
Gusto, the payroll and HR services provider for small businesses, announced it has surpassed $1 billion in revenue, a significant milestone that positions the company closer to entering public markets. Unlike many startups that report annualized recurring revenue (ARR) as an estimate, Gusto’s $1 billion reflects actual revenue generated over the past 12 months.
Founded 14 years ago, the San Francisco-based company has steadily grown its business and maintained positive cash flow for several years, according to CEO and co-founder Josh Reeves. Gusto’s revenue has consistently accelerated over the last five quarters, demonstrating operational momentum in the competitive HR technology space.
Last valued at approximately $9.3 billion during a $200 million tender offer to employees in mid-2025, Gusto’s valuation has remained stable compared to previous years. This contrasts with some of its larger rivals in the sector, such as Deel and Rippling, which have also achieved $1 billion ARR but hold considerably higher valuations, exceeding $16 billion.
The company has made strategic acquisitions to expand its offerings, including the $600 million purchase of Guideline, a startup providing retirement plan services for small and medium-sized businesses. This move complements Gusto’s existing payroll and HR platform, allowing the company to offer a broader suite of employee financial wellness products.
In recent months, Gusto has embraced artificial intelligence to enhance its operations. The firm reports that AI now contributes to 50% of new code development and manages a similar proportion of customer support inquiries. These efficiency gains help differentiate Gusto from competitors, particularly at a time when other HR tech companies are facing challenges, including ongoing legal disputes.
Despite these advancements and strong financial performance, Gusto’s leadership remains cautious about timing its initial public offering (IPO). While traditionally regarded as a strong IPO candidate, the company has not disclosed any immediate plans for going public, citing current market conditions as a factor. Reeves has emphasized a focus on scaling the business and serving customers over pursuing an IPO in the near term.
With a revenue milestone that rivals those of its higher-valued competitors and a growing product suite supported by AI-driven efficiencies, Gusto appears well positioned for future capital raises or a public listing when market conditions improve. For now, the company continues to build on its foundation as a key player in the HR technology industry.